"It's been a horrible fiscal year for revenue collections in most states," said Nick Jenny, a senior analyst at the Institute. "What really hurt was the huge drop in their largest bread and butter revenue source -- personal income taxes."
The report found that personal income tax collections fell 23 percent during the quarter.
The overall tax revenue drop was more severe in some states than others, with high-income states such as California and Connecticut taking the biggest hits. Among the largest drops:
California, down 24.7 percent;
Oregon, down 24.1 percent;
New York, down 19.4 percent; and
During the 1990's, these states profited more handsomely than most from the surging economy and the run-up in the value of the stock market. But now, with the economy lagging and the stock market performing particularly poorly, these states are feeling the ill effects quite acutely.
"Much of it can be traced to the effects of the recession," said Jenny. "The end result was that it both depressed the size of the final tax return payments made in April, while, at the same time, it pushed up the number of tax refunds paid out."
Despite the dour news, four states did see revenue gains: Florida's revenues were up 1.8 percent; Georgia's up 2.1 percent; West Virginia's up 3.8 percent and Minnesota's up 36.9 percent.
Minnesota's large increase was due mostly to new property taxes and the elimination of a one-time tax rebate enacted last year, Jenny said.
